Family Beef Producers Deserve Better From NAFTA

WASHINGTON – On the heels of an announcement that the Trump Administration intends to renegotiate the North American Free Trade Agreement (NAFTA), National Farmers Union (NFU) is urging the administration to amend the agreement to work in the interest of independent beef producers.

In a letter to President Donald Trump, NFU President Roger Johnson contends that NAFTA has been a boon to multinational meatpacking companies to the detriment of small and mid-sized beef producers. Since its implementation, the agreement has led to increased consolidation in the beef industry and loss of U.S. sovereignty to the interests of foreign governments and corporations.

“While trade with our NAFTA partners is important to family farmers and ranchers, the agreement has contributed to increased consolidation in the beef industry and has pushed out small and mid-sized beef producers,” said Johnson. “It has also robbed American producers of the opportunity to proudly stand behind their product and denied consumers the right to know where their food comes from. As you renegotiate NAFTA, we urge you to act in the best interest of American farmers, ranchers and consumers and restore the United States’ sovereignty over farm and food policy.”

While NAFTA has driven an increase in overall beef exports, it has also increased the U.S. beef trade deficit with both Canada and Mexico. From 1993 to 2015, the total U.S. beef trade deficit with its NAFTA trading partners increased by 131 percent, from almost $1.2 billion to over $2.7 billion.

“The free trade agenda has not worked in the best interests of the U.S. beef producer and has had wide-reaching impacts on all sectors of our economy,” noted Johnson. “Multinational meatpackers and their lobbying groups frequently tout increases in exports, but they fail to factor increases in imports, and the impact that a massive trade deficit has on American independent producers and American industries.”

Johnson urged President Trump to make reinstating Country-of-Origin Labeling (COOL) a priority in NAFTA renegotiations as a means to ensuring U.S. sovereignty.

“The elimination of COOL laws due to free trade agreements undermines independent cattle producers who proudly produce high-quality, American-grown beef,” said Johnson. “Prohibitions against COOL also deny consumers the opportunity to know what is in their food and where it is produced.”

Johnson noted that just four beef packers now control 85 percent of the beef market, up from 69 percent in 1990. These multinational corporations take advantage of rules in NAFTA that allow companies to operate across borders. “NAFTA provisions essentially encourage companies to shop for the cheapest production costs,” he said. “Because of this, companies often raise cattle in Mexico and Canada and then bring the cattle back to the U.S. for slaughter and sale.”

NAFTA has also contributed to a steep decline in the number of beef cattle operations in the United States. Between 1992 and 2012, the number of farms raising cattle and calves fell from 1,074,349 to 913,246, a decrease of almost 15 percent. At the same time, the number of the largest ranches – those with 5,000 or more head – increased 60 percent, from 704 to 1,124. The largest operations’ share of the total cattle population increased from 10.4% to 17.9%.

“As you renegotiate NAFTA, we urge you to act in the best interest of American farmers, ranchers and consumers and restore the United States’ sovereignty over farm and food policy. I look forward to working with your administration to reset the nation’s failed trade agenda,” Johnson concluded.

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About NFUNational Farmers Union has been working since 1902 to protect and enhance the economic well-being and quality of life for family farmers, ranchers and rural communities through advocating grassroots-driven policy positions adopted by its membership.